Equipment Loans & Leasing

New equipment can be a great way to grow your business and boost your revenue stream, but the prohibitive cost keeps many people from taking advantage of it. Instead of draining your cash, leasing equipment or borrowing the money to buy it could be the solution your business needs.

Four key factors should drive your decision to lease or buy:

• Length of ownership
• Cash flow
• Ability to get financing
• Tax advantages

To make that decision, you need a partner who will help you weigh the pros and cons and figure out how it affects the rest of your financial picture. Unlike specialty leasing companies, Pinnacle’s financial advisors approve both loans and leases, which means they can be objective in helping you make the right call.

Loans
Equipment is a long-term asset, expected to produce revenue over a lengthy period of time. Business owners should expect the length of the term of the loan to roughly match the anticipated useful life of the equipment. Your Pinnacle financial advisor will work with you to look at cash flow, determine appropriate payments and the equipment’s impact on revenues and see how that cash flow could change.

Leasing
Leasing equipment gives a little more flexibility while also preserving cash and available credit lines.

• Finance Lease
  This is classified as a purchase. It’s also referred to as a non-tax lease and is accounted for as a capital lease, giving you the advantages of ownership without actually owning the equipment.
  
  
• Terminal Rental Adjustment Clause (TRAC) Lease
  This is designed for licensed, titled motor vehicles (over-the-road tractors, trailers, trucks and buses) used for your business. You lease the vehicle and then buy it at the end of the lease for a residual value that you set ahead of time.
  
  
• Split TRAC Lease
  This is a TRAC lease where Pinnacle assumes part of the estimated residual value risk. Both this and the TRAC lease let you classify the transaction as an operating lease.